• Deputy Finance Minister David Mnangagwa said government will not force confidence in the ZiG, acknowledging that trust must be earned through sustained institutional support and market adoption
• The United States dollar still accounts for 75% of transactions, showing that the ZiG remains a minority currency more than a year after its April 2024 launch
• The central challenge is credibility, Zimbabwe’s history of currency collapse means the ZiG will depend on fiscal discipline, exchange-rate transparency, low inflation, and consistent policy execution.

Harare- Zimbabwe's Deputy Finance Minister David Mnangagwa has said the government will not attempt to force public confidence in the Zimbabwe Gold currency, instead committing to sustained institutional support while allowing market forces to determine the pace of adoption.

Speaking candidly on the state of the currency, the deputy minister acknowledged that the United States dollar continues to dominate the economy, accounting for 75% of all transactions more than a year after the ZiG's introduction.

This comes at a moment of heightened anxiety about Zimbabwe's monetary trajectory. The ZiG, launched in April 2024 as the country's sixth attempt at a stable domestic currency, was positioned as a structurally sounder alternative to its predecessors, anchored to gold reserves and foreign currency holdings rather than the political will of the government alone.

Its introduction was met with cautious optimism in some quarters and deep scepticism in others, the latter informed by two decades of watching Zimbabwean currencies collapse under the weight of fiscal indiscipline and institutional failure. The deputy minister's admission that three quarters of economic activity still flows through the dollar suggests that scepticism has not yet been dislodged.

The significance of what David Mnangagwa said should not be underestimated. Senior Zimbabwean officials have not historically been known for volunteering uncomfortable economic data in public. That a deputy minister of finance would state plainly, without apparent defensiveness, that the domestic currency remains a minority instrument in its own economy represents a notable shift in how this government communicates about monetary policy.

"We cannot force people to have confidence in the ZiG," he said, "but we'll continue to support it until the market has confidence." Stripped of diplomatic language, this is a government telling the public that it knows the currency has not yet won the argument, that it cannot win that argument by decree, and that it intends to keep making the case regardless.

That is, by the standards of Zimbabwe's economic policy history, a remarkably honest position to occupy publicly.

The 75% figure is more than a data point and as it is a daily referendum conducted transaction by transaction, across every market, shop, and informal trading space in the country  in which the majority of Zimbabweans are consistently voting against their own national currency.

When people have experienced monetary collapse, when they have watched savings evaporate, salaries become worthless overnight, and prices spiral beyond any reasonable anchor, they do not return to trusting a new domestic currency simply because it has been given a new name and a new structure. They return when the evidence accumulates, slowly and undeniably, that this time is genuinely different.

The ZiG has not yet produced enough of that evidence to move the needle decisively. Three quarters of transactions in dollars means that for most ordinary Zimbabweans, the ZiG remains an instrument of necessity rather than choice, used where it is required, circumvented where it is not.

Understanding why confidence is so difficult to build requires confronting honestly what Zimbabwe's monetary history has done to public trust. The hyperinflation of 2007 and 2008, among the worst episodes of monetary collapse in recorded economic history, did not merely destroy a currency. It destroyed the institutional credibility upon which any currency ultimately depends.

The Zimbabwe dollar that existed before that collapse was not simply replaced, but discredited in a way that left permanent psychological scar tissue on an entire generation of economic actors.

What followed was a procession of monetary experiments, each launched with official confidence and each eventually abandoned or allowed to wither. The bond note. The RTGS dollar. The Zimbabwe dollar reborn. Each iteration asked Zimbabweans to trust again. Each provided reasons, eventually, not to. By the time the ZiG arrived, the country's population had developed an entirely rational and entirely understandable allergy to official optimism about new currencies.

The government is not simply asking people to believe in the ZiG. It is asking them to believe in the government's ability to manage the ZiG, a different and considerably harder proposition.

The approach the deputy minister described, patient, market-oriented, non-coercive  is the correct strategic instinct. Forced currency adoption has a dismal global track record. When governments have tried to compel citizens to transact in a currency they do not trust, through criminalising foreign currency use, mandating pricing in the domestic currency, or aggressively suppressing parallel exchange rates, the results have been uniformly counterproductive. Black markets deepen. Inflation accelerates. Institutional credibility, already fragile, takes further damage.

Zimbabwe has lived through exactly these dynamics. The decision not to repeat them deserves credit.

But patience as a strategy is only as strong as the fiscal and monetary discipline underpinning it. Every government in Zimbabwe's modern history has, at various points, intended to maintain discipline. The intentions have repeatedly collided with political pressures, election cycles, public sector wage demands, infrastructure spending commitments  that have historically found their resolution in monetary accommodation.

When spending pressures are met by printing money, or by policies that amount to the same thing, the exchange rate moves, inflation follows, and whatever confidence has been built dissolves.

The ZiG's gold and foreign currency backing provides a structural buffer that previous currencies lacked. But buffers have limits. They are protective when the underlying fiscal position is sound and corrosive when it is not. The sustainability of the ZiG ultimately depends less on its technical architecture than on the government's willingness to make difficult fiscal choices consistently, including in years when those choices are politically costly.

Mnangagwa was right that confidence cannot be forced. He is equally right that government support matters. But support means more than official statements of commitment. It means the Reserve Bank of Zimbabwe maintaining exchange rate transparency rather than managing the rate in ways that diverge from market reality. It means public sector salaries and government obligations being met in ZiG in ways that create genuine, organic demand for the currency. It means inflation staying low enough that holding ZiG does not feel like watching money evaporate.

Most fundamentally, it means the government doing what it says it will do, not occasionally, not when convenient, but consistently and without exception. Credibility in monetary policy, as in most things, is built in small increments and destroyed in single moments. The ZiG needs an extended run of the former and a complete absence of the latter.

The ZiG is not failing, but it has not yet succeeded in the way that matters most,  winning the voluntary, daily confidence of the people it is meant to serve. At 75%, dollar dominance, it remains a peripheral instrument in an economy that has not yet decided to embrace it.

Equity Axis News